|Amount Invested||RM 90,000|
|Funding Required||RM600,001 to RM1,000,000|
|Description||We built an E-Procurement prototype in October 2016 and started testing out the system and we brought the system out to the market . We started building the E-Procurement system prototype because we felt as Medical Device Vendors, we were not given equal opportunity while participating in a Government Tender and felt we could solve this problem by building a Procurement system that advocates this for the private industry.
We brought the prototype to test it out with our clients who are clients and to our surprise the system gave a lot more vendors opportunities and the Doctors saved some money on it. Keeping this in mind, we brought it to larger organisations as we thought it may help bring more vendors into larger organisations and as soon as we went out there, we were amazed with the reception we got and we understood what the real problems are. Below are the problems we identified with over 20 large organisations:
1. Large organisations ( with over RM 30 million procurement a year) were using manual procurement practices. This caused delay in purchasing and stocking, inefficient negotiations which meant they were not buying at prices that they could buy at (higher prices) , and was expensive due to the large manpower needed to handle the manual processes. Some outsourced
2. Some Large Organisations were using E-Procurement solutions that were to expensive. One of our potential clients was paying RM 900,000.00 a year just to maintain the software solution. On top of that, they had to hire more people to operate the platform which increased their administrative cost drastically.
3. The Large Organisations used the same vendors for the same products for far too many years due to the weakness in sourcing new vendors.
4. SME’s do not invest in any sought of Procurement solutions as they were expensive and ineffective. There were no low cost yet comprehensive Procurement/ B2B marketplace in Malaysia where Malaysian SME’s could purchase more effectively that they could afford.5. Vendors are blocked from entering Large Organisations and offering their products or Services due to monopoly by the bigger Vendors via personal relationships with procurement personnel.
The 5 problems above were the major findings in our Market Research in addition to the micro details in features, we figured out what we should do and how to build our solution. We decided to build a platform that has all the basic Sourcing and Purchasing Features with comprehensive Reporting capabilities which they pay a subscription for (As low as RM 25.00/mth). Besides the procurement capabilities, we also provide them with free access into our marketplace. Below is a list of methods we innovatively decided to solve the problems:
1. We are building a platform that automates the Purchase Recquisition, Request for Quotation, Tender opening, Tender submision, Approval, Branch Management, E-Bidding, and P2P (Marketplace). This will ensure that the sourcing and Purchasing segments of a companie’s procurement is automized and all that is left after they leave our system is to release a Purchase Order on their Finance Systems. This will significantly save money on manpower as we will ensure their vendors are registered properly and participate in the RFQ’s, Tender Request or respond to their Purchase Request on the Marketplace.
2. Buyers can choose to use the platform for free or if they need better features or reports, they could choose the RM 25 a month, RM 75 a month or the RM 150 a month plans which gives up to 24 users access. This cost is the absolute lowest on the market. To access the marketplace, it is free for all buyers. This solves the issue of Large Organisations spending Millions trying to streamline their procurement and end up spending more with administrative cost. We offer them a solution so cheap they could not refuse us.
3. Our strategy to pooling Vendors onto the system is simple, everytime a new Buyer signs up, they have to bring their vendors along onto the system. Each Large Organizations has at least 500 vendors and we can bring in half of them along with the buyer. This means everytime a new buyer signs up, new vendors also sign up along with the Vendors our team independantly source for everyday. This sought of creates a shared environment on the marketplace where all the buyers pool their vendors for everyone to use. This ensures increased choices for every buyer on the platform.
4. Our pricing for buyers is so low even the smallest of businesses can afford to use us. We have a free plan which has all the features with limitation is sufficient for the Micro and Small Businesses in Malaysia where they get to use a proper sourcing and purchasing platform to save cost with state of the art features at no cost at all.5. Since the platform is off open nature, any attempt of favorism or monopoly support shown by procurement personnels on the platform is easily identifiable and reportable. This ensures every Vendor has an increased opportunity to supply their product or services to any organization as long as they are qualified.
As For the Vendors :
1. Vendors have equal chances to supply to larger Organizations.
2. Vendors can choose to use the system free or pay a subscription to us which is either Free, RM 58 monthly or RM 150 monthly depending on the size of the company and requirements of features amd reports. The Free plan is sufficient for the Micro and Small Businesses which is most important as affordibility is our core mission.
3. Depending on which plan they choose, they have to pay us a certain % of commision on every Sale made ONLY VIA THE MARKETPLACE. We do not charge for RFQ’s or Tender Participations. For the free plan, they pay us 3% out of every sale, for the RM 58 plan they pay us 1.5% out of every sale and for the RM 150 plan, they pay us 0.5% out of every sale.
4. With such low charges and commision, they can actually reduce their sales and marketing cost as we bring them constant deals everyday and they pay us less than they would pay a typical Sales Staff.
|Business Opportunity||From our research, we found that there are about 400 + GLC’s, 26,000 + Large Organisations and 973,000+ SME’s in Malaysia. When we went out to the market and spoke to Vendors, Managers, Procurement Professionals and so on, we found our own way to categorise these companies and businesses in a way we could relate to and could possibly make our client. We categorised buyers into 3 different categories :
1. Large Organisations – Those who purchase above RM 10 million a year
There are more than 5 million businesses in total registered in Malaysia but not all of them are active and of course, not all of them can be our customers. Taking both the factors into account, we were confident we could at least go for 5% of the registered companies which gave us the following numbers:
1. Large Organisations – 1,320 potential clients
This brought our target market to a total of 49,970 potential clients who can be buyers or vendors on the system. We also understand that we cannot go for a large client base like this immediately especially in the B2B space so we devised a strategy to do it :
1. We are only approaching GLC’s and Large Organisations that purchase at least RM 30 million a year or could give us at least 250 vendors on the system, whichever or both.
2. Using this strategy, it enables us to collect more and more vendors and stabilise our revenues.
3. Once we have completed the target for our large organisation, we will than approach the medium enterprises with mass marketing and it will create awareness with the micro businesses too. According to Frost & Sullivan, worldwide Sales for B2B E-Commerce will hit USD 12 trillion which indicates there will be a rise in B2B E-commerce trend in this country too. That being said, the opportunity is vast as there is no proper Malaysian marketplace that caters to the B2B segment and there is no clear market leaders.So far on our opportunities really created :
1) we approached a total of 49 customers and got appointment with 27 of them. That is a 55.1% success rate in converting from phone call to appointment.
2) out of the 27 appointments, we have already attended 18. Out of the 18, we have 11 of them who said they will or might try the system. That is 66.1 % rate of interest generation among clients.
3) we have 9 future appointments lined up (out of the 27)
4) out of the 18 we have met, 3 gave us an OUTRIGHT NO. That is a 16.7 % total rejection rate.
5) out of the 18, we have 5 on the fence kind of clients which converts to 27.8%.
We have got large GLC’s and MNC’s ready to beta test the system. We just don’t have enough money to complete the product and need the investment to do so.
|Revenue / Business Model||It is a subscription and commission model. We earn a certain percentage out of every sale on the marketplace and all vendors and buyers are to pay us a certain subscription monthly.
This was all derived AFTER talking to our potential clients. More will be revealed to potential clients.
|Management Team||There are 6 of us on the founding team. A total of 55 years experience between us, 13 businesses started from scratch, 7 sold successfully, and worked on one successful project previously together. Will reveal more to potential investors.|
|Company Background||Started in August 2016 and we have put in RM 90,000.00 of our own money. We are looking to pilot with our beta testers in April 2017 and we are looking for the funds to do so.
Large GLC’s and MNC’s are ready to beta test.
|Funding Milestone||We are looking for a total of RM 693,000.00 investment to launch, pilot and run operations for the first year. Our situation currently is that we have spent the money to build a prototype, bring it to market, conduct R&D and market research and we are ready to build half a product. We need the funding to finish building the product for the ready Beta Testers and to run operations.
We need RM 60,000.00 first to complete the solution and the investor can evaluate whether or not to put in the rest that is needed purely to support the operations as companies that are beta testing are large.
|% Equity Allocation||30%|
|Expected ROI||2 years.|
|Risks and Mitigation||Will reveal to potential investors|
|Exit Strategies||Will reveal to potential investors|